BIG Inc. distributed land to an individual shareholder in a nonliquidating distribution. On the date the land was distributed, BIG Inc.’s adjusted basis in the land was $20,000, the fair market value of the land was $75,000, and the land was encumbered by a $35,000 mortgage, which liability was assumed by the shareholder. The corporation’s earnings and profits were $300,000 on the last day of the year in which the distribution was made after taking into effect any impact of the distribution on the corporation’s earnings and profits. As a result of the distribution, how much is the amount of dividend income to the shareholder, and what is the shareholder’s basis in the distributed property?
